She has been reportedly talking about introducing “social impact bonds” since 2011 and now, as Premier of Alberta, Alison Redford is finally putting her words into action.

On Monday, her government announced that it will be creating a two new investment funds: the Social Innovation Endowment and the Agriculture and Food Innovation Endowment.

The Social Innovation Endowment is a $1 billion fund ($500 million to be added on April 1st and another $500 million next spring). The Agriculture and Food Innovation Endowment is a $200 million fund. Both will be capitalized by the Alberta Heritage Savings Trust Fund, a fund unique to Alberta set up over 35 years ago to collect a portion of revenue from the Canadian province’s oil sands. Today, the fund is used to support government programs like healthcare and education for Albertans.

The Social Innovation Endowment will dispense $22.5 million in 2015, $45 million in 2016, and up to 4.5 percent per year of its closing balance thereafter. Funds will be used for social innovation research, design, and testing, including the exploration of social impact bonds.

Social impact bonds, or “pay for success” models as they are known in the US, has grabbed the attention of cash-strapped governments around the world looking to expand effective preventative programs for the public, hoping that will translate to government savings. It was first developed in the UK by Social Finance, a not-for-profit building the country’s social investment market.

These contracts involve at minimum three parties: a government, investor, and service provider. For example, a bank could fund a program run by a nonprofit that reduces unemployment among at-risk youth. If targeted goals detailed in the contract are met, the government would repay investors from the savings associated with unemployment, which are expected to be significantly larger than the investment. With social impact bonds, there is intent to fund only programs that work well so as to encourage all service providers to focus on the effectiveness of their programs and outcomes achieved. And by bringing in private investors, it opens up new funding sources for public programs.

Critics were quick to dismiss Alberta’s intention to develop social impact bonds following Monday’s announcement, cautioning that these contracts can be sure-fire ways for private investors to profit from the public wallet. In New York, Goldman Sachs invested $9.6 million to a program to reduce recidivism, but a $7.2 million grant from Bloomberg Philanthropies was added as a guarantee for when the program fails to meet the targets. A guarantee is a rarity in these contracts, which are continually undergoing refinement as they are implemented across the US and UK at all levels of government, but critics do not like it, arguing that Goldman Sachs will lose no more than 25 percent of their investment when social impact bond investors should be taking the risk if it comes with a reward.

Another concern is that investors may pursue any means to get their money back when a project fails by claiming mismanagement, among other reasons, on the part of the nonprofit. Ricardo Acuna, executive director of the Parkland Institute research network at the University of Alberta, asked, “How many non-profit agencies have the resources to fight the likes of RBC or Goldman Sachs in court?”

Sometimes, to independently evaluate the success or failure of a social impact bond and ensure proper assessment, a fourth party is brought in and acts as a “referee”, which was the case in New York State’s contract. In addition, Social Finance US, a nonprofit and the American version of Social Finance in the UK, was the intermediary brought in to help structure that contract. There are fears that investors will try to arrange contracts to make sure they earn a profit.

Acuna is not the only skeptic. Last year, the Alberta College of Social Workers told an Edmonton newspaper about ethical concerns, saying, “We don’t want some people to profit from the misery of others. The motive becomes profit, not service.”

Adam Jagelewski, who leads the development of social impact bonds at the MaRS Discovery District Centre for Impact Investing, hears the criticism. He told Canadian Business that opponents point to social impact bonds as a way for government to avoid its responsibilities. But despite its theoretical merits and shortcomings, social impact bonds are untested, he adds, and it’s worth at least seeing if they work before condemning or endorsing them.

In Canada, amidst the research done on and great dialogue about social impact bonds, none have been implemented yet.

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